Microsoft announced on the Windows Team Blog that the Starter Edition of Windows 7 will no longer limit the number of applications you can run at once.

"For the first time, we will be making Windows 7 Starter available worldwide on small notebook PCs. We are also going to enable Windows 7 Starter customers the ability to run as many applications simultaneously as they would like, instead of being constricted to the 3 application limit that the previous Starter editions included. "

It is important to point out that the Starter Edition of Windows 7 is not the only version of Windows 7 designed for Netbooks.  Microsoft says any version of Windows 7 should run fine on a netbook.  In fact, I run Windows 7 ultimate on my Lenovo S10 netbook.

With the exception of the limit on applications that was removed the other restrictions remain.  Windows 7 Starter Edition does NOT include:

• Aero Glass, meaning you can only use the “Windows Basic” or other opaque themes. It also means you do not get Taskbar Previews or Aero Peek.
• Personalization features for changing desktop backgrounds, window colors, or sound schemes.
• The ability to switch between users without having to log off.
• Multi-monitor support.
• DVD playback.
• Windows Media Center for watching recorded TV or other media.
• Remote Media Streaming for streaming your music, videos, and recorded TV from your home computer.
• Domain support for business customers.
• XP Mode for those that want the ability to run older Windows XP programs on Windows 7.

Read the announcement on the Windows Team Blog